Emerging Markets – 4th Quarter December 2020

Emerging markets were the star performers for the quarter with US dollar weakness compounding gains. In dollar terms, the MSCI Emerging Market Index delivered 19.7% over the quarter, its strongest performance in over a decade which also saw it outperform the MSCI Developed World Index.

An improvement to investor risk appetite due to successful vaccine news, and the rally in commodity prices contributed significantly to emerging market’s collective performance. As with developed markets, emerging markets have seen a resurgence of new Covid-19 cases, in part attributed to new strains of the virus. This has added additional pressure to the already overwhelmed health care and financial sectors of emerging markets. Market volatility remains elevated as participants search for signs of a recovery to pre-Covid-19 levels.

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